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Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Income Taxes (Cont’d)
(ii) Deferred Tax (Cont’d)
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the
asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted
at the end of the reporting period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when the deferred taxes relate to the same taxable entity and the same taxation
authority.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax
items are recognised in correlation to the underlying transactions either in other comprehensive income or directly
in equity and deferred tax arising from a business combination is adjusted against goodwill or excess of the
acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over
the business combination costs.
(iii) Goods and Services Tax (“GST”)
Revenues, expenses and assets are recognised net of GST. However, when the GST incurred are related to
purchases of assets or services which are not recoverable from the taxation authorities, the GST are included as
part of the costs of the assets acquired or as part of the expense item whichever is applicable.
Receivables and payables are stated with the amount of GST included (where applicable).
The net amount of the GST recoverable from or payable to the taxation authorities at the end of the reporting
period is included in other receivables or other payables.
Government Grants
Grants from the government are recognised initially as deferred income at their fair value where there is a reasonable
assurance that the grant will be received and the Group will comply with all attached conditions.
Grants that compensate the Group for expenses incurred are recognised in profit or loss over the periods necessary to
match the grants with the related expenses which they are intended to compensate for. These grants are presented as
other income in profit or loss or a deduction in reporting the related expenses in profit or loss.
Borrowing Costs
Borrowing costs, directly attributable to the acquisition, construction or production of a qualifying asset are capitalised
as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. The capitalisation
of borrowing costs is suspended during extended periods in which active development is interrupted.
All other borrowing costs are recognised in profit or loss as expenses in the period in which they incurred.
Contract Customers
When the outcome of a contract can be estimated reliably, revenue and costs are recognised by reference to the stage
of completion of the contract activity at the end of the reporting period, measured based on the proportion that contract
costs incurred for work performed to date bear to the estimated total contract costs except where this would not be
representative of the stage of completion. Variations in contract work, claims and incentive payments are included to
the extent that they have been agreed with the customer.
Notes To The Financial Statements
(cont’d)